Moves to streamline employment law launched

New measures designed to give firms more flexibility in managing their workforce and to cut employment red tape, have been announced.

Launching consultations on 14 September, Business Secretary Vince Cable said: “We have been looking across the range of employment laws with a view to making it easier for firms to hire staff while protecting basic labour rights.

“Our starting point is that Britain already has very flexible labour markets.  But we acknowledge that more can be done to help small companies by reducing the burden of employment tribunals, which we are reforming, and moving to less confrontational dispute resolutions through settlement agreements.”

The measures include:

  • a settlement agreements consultation starting on 14 September, which will set out how the process will work in practice. Settlement agreements are a simplified version of compromise agreements, a legally binding contract to bring employment to an end that usually provides for a severance payment to the employee, who agrees not to proceed to an employment tribunal.
  • an unfair dismissal claims consultation, also starting on 14 September, which will look at the potential for reducing the compensation cap, currently at £72,300, to either a sum capped at up to 12 months pay or new, reduced, upper limit.
  • further streamlining of employment tribunals, with a consultation starting on 14 September  including proposals on how judges could dismiss weak cases more easily and reduce the number of preliminary hearings;
  • a response to a call for evidence on proposals for compensated no fault dismissal for micro-firms and the Acas code on discipline and grievance. The government will not take forward the proposal on no fault dismissal, but will work with Acas to make the guidance to their code more accessible, especially for small businesses.

Link: Consultation documents